HP pays 55 million in fraud case

Computer giant Hewlett-Packard (HP) has agreed to pay US$55 million to settle claims it paid kickbacks in relation to US government contracts.



HP was accused of paying other companies so it would recommend HP products to government entities.



The government's chief procurement body, General Services Administration (GSA), entered into a contract with HP in 2002.



At that time, it was alleged that the contract, which involved the supply of computer equipment and software, was wrongly priced because HP provided incomplete information to the GSA.



A spokesman for the US Department of Justice said the government would always take action against companies seeking to taint the government procurement process with illegal kickbacks.



He said contractors must deal fairly with the government when doing business with federal agencies.



HP says the $55 million payout will affect earnings on its shares.